A privately-owned Australian company has bought almost 50 per cent of Irish airline CityJet, for a figure believed to be around £6 million. It is understood that the existing shareholders will dilute their stakes to facilitate the investment.
The Irish airline is thought to be approaching profitability, followed several years of difficulties. It is believed the cash injection will be used to extend the company's range of aircraft and services.
The new investor is the National Jet Systems Group, an aviation group based in Adelaide, which is owned by Mr Warren Seymour and Ms Adele Lloyd. It employs 1,000 people and has 44 aircraft.
National Jet Systems flies approximately 25 Bae 146 aircraft, similar to those which CityJet uses. Ironically, CityJet leased an aircraft from the Australians in 1994. Industry sources said CityJet had been on the look-out for a suitable aviation partner since it parted company with Swedish airline Malmo in 1997.
It is understood that National Jet Systems provides air services for the corporate market and for the Australian government. However, this is thought to be the company's first investment in Europe.
CityJet declined to comment on the deal last night. It is understood that the company is keen to develop one or two new routes. CityJet currently has eight aircraft, which includes three Saab 2000s.
It flies scheduled routes from Dublin to London City Airport, Dublin-East Midlands, Dublin-Paris, which it code shares with Air France and London-Strasbourg and London-Paris, which it flies on behalf of Air France. The company has recently begun flying to Malaga and will introduce flights from Dublin-Lisbon/ Faro.
Current investors in CityJet are Yeoman International, who is the largest single shareholder with 30 per cent; Standard Life (20 per cent) and four other investors.
The Australian investment will see the dilution of the current shareholdings by roughly 50 per cent each.
Established five years ago, CityJet has experienced turbulent times itself. Two years ago it was put into examinership with accumulated losses of £13 million and debts of £8.4 million. Under the scheme approved for its survival, creditors agreed to write off £6 million of the debts. London City Airport, which was owed £2.4 million, agreed to write off £1.8 million. One of the new shareholders then was Malmo, but in 1997 it sold its 43 per cent stake to the Irish shareholders because of differences over how the airline should be developed.
Industry observers said last night that CityJet, which is said to be doing well on passenger numbers, has struggled to find an identity. The airline originally targeted business passengers only, but later broadened its focus.
